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Let's Make a Deal - The MS-EU Settlement - Updated
Monday, October 22 2007 @ 11:47 AM EDT

Here's the press relase from the EU Commission announcing a settlement with Microsoft. As you will see, it's some good, some bad. The patent part is terrible. Worse than terrible. They are not blocked from offering patent deals, only constrained as to how much to charge for a license, which is not and never was the issue. So they'll beef up those initiatives, I'm sure. However, the good part is that they were compelled to separate the patent license offer out and make it optional. Thanks, but no thanks. Here's the FAQ. Here's the 2004 EU decision [PDF].

They are compelled now to let Open Source competitors have access to their interoperability information. That part of the settlement is in most respects very good for FOSS. The royalty on that is reduced to a flat fee of €10 000, which I'm sure Linus could have easily paid when he was a student and starting the Linux development. Not.

I'd call it a split decision, maybe not even that good. There is a need for greater understanding of how FOSS is developed, how the GPL, the most popular FOSS license, works and what it means in a patent context, unless folks just want to kill it off, of course. Why anyone but Microsoft would want that is a mystery to me. The EU Commission is calling it a great day for Open Source. I'm afraid I can't agree with respects to the patent part of the settlement. But this is one day in a long struggle. It's not the final chapter.

The media is calling it a great victory too, and to a point it is, but not with respects to the patent implications:

I'm guessing Microsoft lawyers are high fiving each other, having snatched an important victory from utter and total defeat. The rest is excellent, of course, and in no way do I mean to detract from the hard work and persistence that the EU Commission has shown. However, I don't think they understand how seriously broken the US patent system is currently, and how easy it is to abuse it, or they don't feel it's their job to fix the US problems, or how central patents are to Microsoft's current strategy against FOSS. Read this from the FAQ, and you'll see it's just not workable here:
Can open source software developers implement patented interoperability information?

Open source software developers use various “open source” licences to distribute their software. Some of these licences are incompatible with the patent licence offered by Microsoft. It is up to the commercial open source distributors to ensure that their software products do not infringe upon Microsoft’s patents. If they consider that one or more of Microsoft’s patents would apply to their software product, they can either design around these patents, challenge their validity or take a patent licence from Microsoft.

In the US, they let you patent HTML links and other super basic things, basic but essential. The GPL can't take a license for a patent, period. So that leaves work around the patent. If it's basic enough and necessary enough, you can't do so and still function normally. It's like trying to do math if you aren't allowed to use the 2 unless you pay Microsoft for it. So now what? Try to win in court? How do individual programmers or small projects do that? They can't. So what this part of the agreement is saying to me is that the GPL is not allowed to compete on an even playing field, and it will have to make do with less functionality.

You'll remember Thomas Vinje, and here's his statement: "Today‘s statement by European Commissioner for Competition Neelie Kroes marks an important milestone in the Commission‘s efforts to address Microsoft‘s continuing abuse of its dominant position and ensure competition on the merits in key software markets. ECIS commends the Commission and particularly Commissioner Kroes for their diligence in pursuing this issue over the last eight years." Of course the key is compliance, as is pointed out in the full ECIS statement [PDF], which includes this paragraph:

As always, it is essential that the Commission continues vigorously to monitor Microsoft's compliance particularly with respect to the completeness of the interoperability information for Vista and Windows Server 2008. The provisions allowing for private enforcement actions to complement the Commission's enforcement powers are key to ensuring the ultimate success of the Commission's 2004 Decision.

I see everyone has learned from the compliance difficulties in the US.

Here's Microsoft's statement:

At the time the Court of First Instance issued its judgment in September, Microsoft committed to taking any further steps necessary to achieve full compliance with the Commission's decision. We have undertaken a constructive discussion with the Commission and have now agreed on those additional steps. We will not appeal the CFI's decision to the European Court of Justice and will continue to work closely with the Commission and the industry to ensure a flourishing and competitive environment for information technology in Europe and around the world.

Update: Business Week has the most thorough coverage, including the first statement I've seen from FSFE:

The open-source software sector isn't popping open champagne bottles just yet. "There are so many things that could go wrong that we don't want to say anything until we have seen the actual documents and reviewed the actual conditions," says Carlo Piana, a partner at Milan law firm Tamos Piana & Partners, who represents the Free Software Foundation Europe, an industry group that champions open-source software.

A group representing a coalition of tech companies including IBM (IBM), Oracle (ORCL), and Nokia (NOK) was equally cautious. "We are more optimistic than we have been in the past, but the proof will be in the pudding," says Thomas Vinje, a partner in the Brussels office of Clifford Chance who represents the European Committee for Interoperable Systems.

Vinje says the group plans to remain vigilant and will continue to press its case with the EC to force Microsoft to reveal similar interoperability information for newer products, such as Vista and Windows Server 2008. "The number of instances in which Microsoft is engaging in similar conduct is escalating, not declining," he says.

We have also now the transcript of the press conference:

Neelie Kroes Press Conference Q&A Brussels, October 22, 2007

Jonathan Todd: First question, David Gow.

8:46 (David)

Q: Well, in view of all this, what's the likelihood that you will not enforce the outstanding payments which could be due? And the other question is, have they also indicated to you that they will not appeal the CFI ruling, as they have already, for example in Korea, they've already stayed their hand on the appeal in Korea?

Neelie Kroes: Expectations not to appeal are positive from my side. I expect that that will be the case, but I am sure that Microsoft will react themselves. We have to take into account that what is dealt with in the past and what is connected with that behavior still has to be seen in a complete package. So wait and see.

10:05 (Tom)

Q: Commissioner, could you tell us what this means now for other companies in other branches, are you preparing new cases?

Neelie Kroes: The shop is still open, I can assure you, and not only open because we are looking for activities. I can assure you that we are indeed highly involved in doing our job for the consumer and that there should be a fair level playing field and there are a couple of other cases still at our desks. If you will allow me just to add to David, perhaps that will even enlarge his awareness of our attitude. As from today, Microsoft has established compliance -- no doubt about that -- I have touched upon that -- there is therefore no reason to impose further penalties on Microsoft as of this day. That is a very clear, forward answer.

11:16 (Robert)

Q: Yes, Commissioner. You mentioned that the Decision had precedent from Microsoft in this and other cases, and do we see that the sort of agreement that you've reached here regarding flat fees and the sort of levels of royalty rates, do you see that as a platform for other IP or royalty disputes that exist, either for Microsoft or for other companies?

Neelie Kroes: This is a unique case and let's just stick to this case.

11:56 (Anne-Marie)

Q: A question in Dutch, if I can. Mrs. Kroes, what do you think about the fact that the problem has been this result and what does this mean in practice for consumers, how are consumers actually going to experience this result?

Neelie Kroes: Well, I have a good feeling about it, and I also feel a bit sad, because it took so long, it took so many years, and during those many years, the consumers suffered from the fact that Microsoft didn't go along with what the Commission asked it to do, the first time in the history of the EU and the Community that this happened. Having said that, I'd like to stress the positive side of today's events. From today, there will be more competition on the market which is open where there is such great interest for consumers, the IT market so from today, there will be as much competition as consumers should rightly expect from this market.

13:06

Q: Microsoft has been seen as a bit of a bad guy over the last few years. Does this decision mean that this status has been lifted?

Neelie Kroes: Anyhow, for today, I am counting the positive results that Mr. Ballmer and I myself reached upon this morning. And he and I are aware that that was the past, so let's look into the future and with this statement of Steve Ballmer, I sincerely hope that we can just close this dark chapter of our relationship and go on in absolutely constructive and positive ways.

14:01 (Matthew)

Q:Good morning, Commissioner. People have critized the Commission for over-regulating dominant companies. You said, quickly on intellectual property areas, here today we have a decision that sets a flat fee on valuable IP. Do you think there's a risk that the Commission could be viewed as setting prices for intellectual property? Because this is something that comes up in other cases like that, such as the Qualcomm case?

Neelie Kroes: Interesting question, Matthew, but I don't think so. This is a case in itself. And with this flat rate, and with such a low rate, I think that we can indeed say that we are protecting the consumer and stimulating competition and especially for those who are involved in open source development actions.

15:03 (Alain)

Q:Yes, Madame, two questions, please. If you could respond in French. The first question is very simple one, could you just remind me of how much Microsoft has already paid in fines, and what it still has to pay? Having to do with the past. And to pick up the question that has just been asked by my colleague. Generally speaking, the Commission is very much criticized, so do you think that this is a victory for the Commission, for consumers, will there be other cases? Does this strengthen you in your resolve to force giant multinationals to their knees, companies which feel that they have a free hand to do as they like in terms of their practices?

Neelie Kroes: I'm happy with your question, for it gives me the opportunity to underline again that the size of a company, that a sector, and that the nationality, but also that the shareholdership, is not important for me. of course, I could have a preference, it's not making sense in our decision-making. The only point is, and rightly mentioned by you, it is a victory day for the consumer, and nothing to do with the Commission or whatever. We are doing our job, and we are paid for it, and that's it. We have to take into account that there should be a fair level playing field whatever the size, whatever the nationality those companies are. And in this case it is indeed highly important that we take into account that this makes sense to every consumer -- by the way, not only in Europe, we are talking about worldwide, and we are discussing that level. So all in all, a positive day for the consumer.

17:10 (Christian)

Q: Commissioner, good morning. You said that you talked with Mr. Ballmer now for two or three weeks. The ruling of the EU court was four weeks ago. So apparently, the only way to deal with Microsoft is by EU court rulings. Is this impression true?

Neelie Kroes: When the court ruling was published, we got in touch, and Mr. Ballmer and I found each other in a small restaurant, so to say, there it all started, nobody could find out where, or whatever, and there we were indeed promising each other that there should be a compliance of what has to be done much earlier.

18:13 (Antonio)

Q: I hope Microsoft paid the bill in the restaurant (laughter), but my question is on the fine. You may not have decided yet on the amount you may impose, if any, to Microsoft but please try to help us just avoid any present misinterpretation,miscalculation. What is, as of yesterday, the highest level of amount you can impose on Microsoft?

Neelie Kroes: I will be back with the news when we have taken that decision. Absolutely. I mentioned already today that anyhow -- and that is a certainty, and there are not that many certainties in life, as you aware --that from today on, there is no reason to impose further penalties on Microsoft as of this Monday, the 22nd.

19:19 (Maria)

Q: Commissioner, you mentioned that there was this sort of groundbreaking contact this morning, so maybe could you explain to us a little bit what was the content of this conversation? And also, secondly, do you see any progress regarding the Vista issue? Thank you.

Neelie Kroes: We are dealing with the past. And we are dealing with the compliance that was asked for already a long time ago and that wasn't fulfilled. And after that meeting in the restaurant there are a couple of very interesting discussions to be mentioned, but that is between him and myself. And the result of that total discussion during those weeks is indeed compliance and what I have mentioned. So I think the result counts and that makes sense for all of us.

20:36 (Ingrid)

Q: To follow up on the previous question, maybe because I'm not too familiar with the case, up until now on this case, what has Microsoft had to pay or has paid or is this a decision you have to take?

Neelie Kroes: I will be back when that is dealt with and when we have taken that decision.

21:04 (Charles)

Q: Hi Commissioner, Charles Ferrell from the Wall Street Journal. Unless I am misunderstanding, it seems that patents are not included in the interoperability licenses for developers. Do you worry that Microsoft could simply continue its behavior by saying "Patents are an issue here and you won't be able to license the patents", in other words make it difficult for developers to license patents from them? And what remedies might companies have if they felt like patents were a problem? The second question is, what was the restaurant? (laughter)

Neelie Kroes: out of the 154 individual protocols that can be licensed according to Microsoft's claims at that time, only 31 are covered by patents. And furthermore, a patent does not necessarily cover all aspects of the protocol in question. So I think that could be one of the answers. And developers would have to ask whether they would need to take a patent license from Microsoft or whether they could design around the patents. So those opportunities are up those who are using that -- the developers.

Q: Who paid for the dinner?

Neelie Kroes: I paid for the dinner, for I didn't want to have problems about that, for I was sure that you were interested in that.

Q: Which restaurant?

Neelie Kroes: Oh, which restaurant? Close to my hometown, in Holland, yes. (laughter)

22:59

Q: This agreement you have with Mr. Ballmer covers also Vista? Does this mean that the Commission is not engaging the procedure on Vista now?

Neelie Kroes: Vista, and that is also a part of the work now, so that is the future.

Jonathan Todd: David, you had another question?

22:31 (David)

Q:Sorry, yeah. Why is this enforceable before the High Court in London? Why in a country which is halfway out of the EU, if you see what I mean? (laughter) Especially after the events of last week? And now that -- just on a sort of personal basis, well, not personal, no, corporate basis -- was this sort of love at 10th sight? And will it lead to further developments in the tryst between the Commission and Microsoft?

Neelie Kroes: By the way, just to make one remark outside this issue I think that they anyhow offered one of their best politicians to be involved in the process in this house so we can't neglect those great gestures. Having said that, why the court in London? Anyhow, I want to get rid of this type of activities and with our arrangement, we can. It's much better in this case when parties are having a misunderstanding, so to say, that they go to court and find out how things are going on. I got the information that the court in London is the most sophisticated in these issues -- nothing to say about other courts, but in this case that's already done by the way so let's keep the line.

Jonathan Todd: I can't see any further questions. There is of course a press statement available, a set of frequently asked questions. Some gentlemen from DG Competition if you have any more technical questions. It just remains for me to say thank you for coming, thank you to the interpreters, thank you to the Commissioner.

**********************************

Antitrust: Commission ensures compliance with 2004 Decision against Microsoft

Competition Commissioner Neelie Kroes stated: “I welcome that Microsoft has finally undertaken concrete steps to ensure full compliance with the 2004 Decision. It is regrettable that Microsoft has only complied after a considerable delay, two court decisions, and the imposition of daily penalty payments. However, the measures that the Commission has insisted upon will benefit computer users by bringing competition and innovation back to the server market. The Commission will remain vigilant to ensure that Microsoft continues to respect its compliance obligations and does not engage in other anti-competitive behaviour. I have always said that open source software developers must be able to take advantage of this remedy: now they can.”

Microsoft has a 95% market share on the desktop operating system market, and in excess of 70% on the market for work group server operating systems. Open source work group server products are virtually the only alternative for users and are thus the main surviving competitive constraint on Microsoft. More competition on this market should offer consumers more innovative products, with improved functionality at better prices. For that reason, it is vital to the effectiveness of the 2004 Decision that Microsoft also complies by giving access open source developers access to the interoperability information.

Microsoft provides two separate licensing arrangements to companies wishing to obtain the interoperability information as foreseen by the 2004 Decision's remedy. The first is a “No Patent Agreement” allowing licensees access to the interoperability information, but without taking a licence for patents which Microsoft claims necessary, a claim disputed by some third parties. Microsoft has now made three changes to this licence:

* altering the terms of the licence so that it is compatible with the open source business model
* reducing the royalty to a flat fee of €10 000
* allowing effective private enforcement of warranties regarding the completeness and accuracy of the information provided.

The second licence (the “Patent Agreement”) is for the patents which Microsoft considers relevant. Microsoft will now offer a worldwide patent licence for a reduced royalty of 0.4 % of licensees’ product revenues.

Companies therefore continue to have a choice of agreement, depending on whether they consider they need a patent licence.

Initially, Microsoft had demanded a royalty rate of 5.95 % of revenues for a combination of access to the secret interoperability information and for a patent licence and had refused to make the licence compatible with the open source business model.

In a statement of objections of 1 March 2007 the Commission warned Microsoft of penalty payments over its unreasonable pricing (IP/07/269). The Commission also stated that it would ensure that open source developers could have access to the non-innovative parts of the interoperability information (IP/05/673).

In addition to the two licences Microsoft will publish an irrevocable pledge not to assert any patents it may have over the interoperability information against non-commercial open source software development projects.

These measures will ensure that Microsoft’s competitors in the work group server market, including those following the open source business model, will have access to the interoperability information on reasonable terms which will in turn lead to more competition and innovation in this market.

As of today, the interoperability information appears to be substantially complete. Licensees may raise additional issues and Microsoft has an ongoing obligation to update the information as its products evolve. Both the Commission and the licensees will have the means to ensure that Microsoft keeps the interoperability information updated.

Background

Work group server operating systems are operating systems running on central network computers that provide services to office workers around the world in their day-to-day work such as file and printer sharing, security and user identity management. The Commission decision ordered Microsoft to disclose to competitors interoperability information which would allow non-Microsoft work group servers to achieve full interoperability with Windows PCs and servers - that is to say for their servers to be able to seamlessly 'communicate' with the ubiquitous Windows operating system.

In the 2004 decision, Microsoft was fined €497 million for infringing the EC Treaty rules on abuse of a dominant market position (Article 82) by leveraging its near monopoly in the market for PC operating systems onto the market for work group server operating systems (see IP/04/382 and MEMO/04/70). To put an end to this abusive behaviour, the Commission ordered Microsoft to disclose on reasonable and non-discriminatory terms interoperability information which would allow non-Microsoft work group servers to achieve full interoperability with Windows PCs and servers. The 2004 decision was recently upheld by the Court of First Instance (see CJE/07/63 and MEMO/07/359).

The open source (business) model is based on the freedom of every recipient of a computer programme to copy, modify and redistribute it. Revenues are derived from services offered with the software. Open source vendors are Microsoft’s main competitors in the work group server operating system market. See also http://ec.europa.eu/comm/competition/ antitrust/cases/microsoft/ for a complete chronology of the case.


  


Let's Make a Deal - The MS-EU Settlement - Updated | 303 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
Corrections
Authored by: john-from-ct on Monday, October 22 2007 @ 12:05 PM EDT
. . . if needed

---
Just another greybeard geek!

[ Reply to This | # ]

Off Topic
Authored by: Anonymous on Monday, October 22 2007 @ 12:07 PM EDT
Here

[ Reply to This | # ]

10 000 Euro = confidentiallity?
Authored by: Anonymous on Monday, October 22 2007 @ 12:08 PM EDT
If someone pays 10000 Euro for this information, and writes some FOSS with it,
is the info now disclosed? ie no one else ever needs to pay - they just look at
the FOSS code?

I'm sure MS isn't going to allow that.

So is the 10000 paying for trade secrets? Just the paper it is printed on? what?

[ Reply to This | # ]

Off Topic Here
Authored by: SilverWave on Monday, October 22 2007 @ 12:08 PM EDT
.

---
Software Patents are leeches on the creativity of mankind.

[ Reply to This | # ]

  • Off Topic Here - Authored by: Anonymous on Monday, October 22 2007 @ 06:14 PM EDT
  • Followup - Authored by: Anonymous on Monday, October 22 2007 @ 09:52 PM EDT
NEWSPICKS Comments Here
Authored by: SilverWave on Monday, October 22 2007 @ 12:11 PM EDT
.

---
Software Patents are leeches on the creativity of mankind.

[ Reply to This | # ]

Let's Make a Deal - The MS-EU Settlement
Authored by: Anonymous on Monday, October 22 2007 @ 12:19 PM EDT
Patent Deal OK

It's a percentage of revenue, clearly allowed to work with FOSS where other
setups don't work.

Give the commission some, no actually a lot, of credit.

They issued a very clearly reasoned set of findings, that also happened to stand
up legally.

It's pretty clear from the decision that they understood the facts clearly.

And the $10k fee is fine. They've told MS they need to work with others, but the
expense of doing so can fairly be borne to some degree by the people they help.
They struck the right balance here as well. Otherwise you open up companies to
Denial of Service attacks with tons of requests in this space, costs of which
are born by the company.

We'll have to see all the details of course, but this doesn't look like victory
from the jaws of defeat to me. This looks pretty much like victory confirmed.
Samba will be amazing after this.

[ Reply to This | # ]

I don't get it - I thought there were no software patents in the EU ?
Authored by: Anonymous on Monday, October 22 2007 @ 12:31 PM EDT
I thought the EU was the land of enlightenment and the patent war - while onging - was being won by the no patent side.

If ignorance is bliss,
then I'm living in Nirvana !

[ Reply to This | # ]

Microsoft paid nothing to use the BSD networking protocols when they started.
Authored by: Anonymous on Monday, October 22 2007 @ 12:31 PM EDT
This settlement is way out of balance.

Microsoft should give freely, the same as they got freely when they started
out.

The lawyers and judges still don't get the whole MS standards stealing picture
at all.

This is nothing short of a win for Microsoft.

[ Reply to This | # ]

They are not blocked from offering patent deals...
Authored by: SilverWave on Monday, October 22 2007 @ 12:32 PM EDT

Was that ever a remedy that the EU commission could have imposed?

The way I read the commission statement was that they are not expecting FOSS
developers to sign up to it either.

_________________________________
Can open source software developers implement patented interoperability
information?

Open source software developers use various “open source” licences to distribute
their software. Some of these licences are incompatible with the patent licence
offered by Microsoft. It is up to the commercial open source distributors to
ensure that their software products do not infringe upon Microsoft’s patents. If
they consider that one or more of Microsoft’s patents would apply to their
software product, they can either design around these patents, challenge their
validity or take a patent licence from Microsoft.
_________________________________

Also this looks like a positive development:
_________________________________
In addition to the two licences Microsoft will publish an irrevocable pledge not
to assert any patents it may have over the interoperability information against
non-commercial open source software development projects."
_________________________________

Maybe I am being naïve but this looks to be 70/30 in our favour.

I read the patent offer as being mainly a product for proprietary software
competitors to use.

Then again after the last attempts to control MS proved so fruitless maybe I was
surprised to nail them down to this much.

It will be interesting to see the small print.


---
Software Patents are leeches on the creativity of mankind.

[ Reply to This | # ]

Patent agreements?
Authored by: Anonymous on Monday, October 22 2007 @ 12:36 PM EDT

What patents?

Would those be the bits of paper issued by the EU patent office that look like software patents, smell like software patents, walk like software patents but - since the EU doesn't actually recognize software as patentable - can't actually really be software patents, honest, and would hopefully turn into pumpkins if their holders tried to enforce them?

[ Reply to This | # ]

Let's Make a Deal - The MS-EU Settlement
Authored by: PolR on Monday, October 22 2007 @ 12:41 PM EDT
I have mixed feelings about this one. A lot of good can come out of it if the
release of information provisions are implemented as the press release suggests.
But obtaining anti-trust compliance from Microsoft is a game of legal
whack-a-mole. We won't exactly know how much the EC obtained until we see what
the next mole look like.

[ Reply to This | # ]

Possible problem for MS
Authored by: Anonymous on Monday, October 22 2007 @ 12:51 PM EDT
Given the historical problems that Microsoft has had in writing code that
actually matches their protocols, I suspect that a company that used the
licensed protocols and then found they did not work properly would have a strong
legal case in the EU.

[ Reply to This | # ]

Let's Make a Deal - The MS-EU Settlement
Authored by: Anonymous on Monday, October 22 2007 @ 12:58 PM EDT
Are you sure the 10,000 EU price tag applies to open source? My reading was that
those two parts were independent - the deal for open source was not specified.

[ Reply to This | # ]

Let's Make a Deal - The MS-EU Settlement
Authored by: Anonymous on Monday, October 22 2007 @ 12:59 PM EDT
I'm at something of a loss here. Does this agreement mean the M$ will need to
identify which patents are indemnified, or is it just a blanket coverage; an M$
win. If I paid .4% for coverage, I'd want to know what protection I was
getting. If my income is zero and M$ must declare patent numbers I see a FOSS
win.

[ Reply to This | # ]

Let's Make a Deal -
Authored by: HockeyPuck on Monday, October 22 2007 @ 01:04 PM EDT
Ok now that they have been told over and over, with threats and all; they still
dragged their feet disclosing anything. And what they "disclosed" is
very difficult to work with.

Now the EU and MS are Ok with this agreement. To see our (MS) secrets; pay us.
To use our code; pay us. And oh, by the way, we never said WHEN you will get
this information. Judging by how quickly they responded to the EU (threats and
all); what makes anyone think they will provide anything in a timely manner. I
can hear them now; sure we'll hand over our 2007 media server APIs just as soon
as 2008 comes out and we change them.

[ Reply to This | # ]

How much is 0.3% of ZERo ?
Authored by: Anonymous on Monday, October 22 2007 @ 01:07 PM EDT
What if somebody takes the "patent deal" and releases the
software at zero cost ? This is exactly how MS drove a
small company into the ground (was it called
looking-glass ?) when they bought the technology that
formed the basis of their IE browser. They were supposed
to pay a royalty on copies sold in form of a given
percentage, but MS decided to distribute IE for free, thus
not paying a single penny to the company who wrote the
software.

Now, it is time for payback, I think. Somebody should
quickly take the patent deal offer and distribute the
software for free, laughing in the face of MS.

Zs.Zs.

[ Reply to This | # ]

Is this a fine deal or not?
Authored by: Anonymous on Monday, October 22 2007 @ 01:07 PM EDT
Do they still have to pay the fine?

[ Reply to This | # ]

"non-innovative parts of the interoperability information"?
Authored by: rsteinmetz70112 on Monday, October 22 2007 @ 01:09 PM EDT
Does this phrase worry anyone? It seems to me to be the pretext for the next
stall.

I can imagine a heavily redacted specification.

---
Rsteinmetz - IANAL therefore my opinions are illegal.

"I could be wrong now, but I don't think so."
Randy Newman - The Title Theme from Monk

[ Reply to This | # ]

10,000 for each developer that sees the documentation?
Authored by: rsi on Monday, October 22 2007 @ 01:22 PM EDT
Or could IBM pay the fee, and then allow any developer to see the docs? Are
there any hidden implications the EU has not considered, considering
Mickey$oft's past reputation, and lack of integrity

M$, and the EU should publish the specifications immediately, and allow feedback
before the EU signs off on this "deal"

[ Reply to This | # ]

Let's Make a Deal - The MS-EU Settlement
Authored by: billposer on Monday, October 22 2007 @ 01:32 PM EDT

Did anyone else notice that the New York Times article claims that Microsoft has agreed to release its "confidential software code"? This is, of course, patently false - they've agreed to release protocols, not code, and the distinction is significant since one of Microsoft's arguments was that being forced to reveal code was unfair and made them give up their valuable IP.

I could understand how those ignorant of technology might not understand the distinction, but one would hope that the New York Times would use writers with at least a basic understanding. In any case, they've made this same error at least twice before, and the last time, a few weeks ago, I made a complaint about it to the Public Editor. My question is, are they so ignorant that they don't understand the difference, working from Microsoft press releases, or deliberately shilling for Microsoft?

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Cost vs Use of an invention
Authored by: Anonymous on Monday, October 22 2007 @ 01:33 PM EDT

I'm more concerned with the terms surrounding the "patents" then I am with the cost of said patent. If the terms do not allow you to share the "invention" with others, a zero cost would not work with the GPL.

Question for the EU Commission: Will MS now willingly step forward and disclose the "publicly disclosed" patents they feel various FOSS infringes? After all, to be able to share the invention with others via the GPL, full disclosure is a must. Whether MS discloses those patents to the first licensee or prior seems to make little difference. I state that the patents are already "publicly disclosed" because they are due to the nature of the patent process itself. However, with several thousand patents filed/owned by MS, how is one to know which of the patents are impacted without thoroughly examining them all?

In addition to the two licences Microsoft will publish an irrevocable pledge not to assert any patents it may have over the interoperability information against non-commercial open source software development projects.
Err.... MS: please define "non-commercial open source software development projects". After all, if a commercial entity - such as IBM - decides to start using and contributing to an FOSS project - say Linux - does it then become a commercial project?
altering the terms of the licence so that it is compatible with the open source business model
Err.... MS: please define "open source business model". After all.... now that your own licenses have been declared "open source" could you not limit the terms to said licenses?

RAS

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"legal security" for open-source programmers
Authored by: Anonymous on Monday, October 22 2007 @ 01:34 PM EDT
I haven't seen anyone here yet rehash this line from Neelie Kroes's statement:
I told Microsoft that it should give legal security to programmers who help to develop open source software and confine its patent disputes to commercial software distributors and end users. Microsoft will now pledge to do so.
I see this as a limited kind of good news. While software patents are a bad idea all around, a particular issue has been the particular vulnerability of FOSS developers to baseless patent lawsuits -- I mean those FOSS developers who are not generating a revenue stream to pay for defending themselves in litigation. So this pledge seems to confine Microsoft to suing those who can defend themselves. On the down side, it doesn't stop Microsoft from using a cat's-paw to do the suing.

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Microsoft Agreemnets
Authored by: Anonymous on Monday, October 22 2007 @ 01:48 PM EDT
I am sure that the devil is in the details of any Microsoft agreement. If you doubt that, read any Microsoft EULA.

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As Lamlaw says
Authored by: Nick_UK on Monday, October 22 2007 @ 02:04 PM EDT

http://www.lamlaw.com/tiki-read_article.php?articleId=411

Lets see it happen first. Just because MS appear to 'agree' with it, there is a
big difference between words and action - which, as we know from experience with
MS, doesn't hold a lot of water.

Nick

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Jeremy Allison's thoughts?
Authored by: stites on Monday, October 22 2007 @ 02:28 PM EDT
Jeremy Allison is the lead developer for Samba and as such he probably is the
open source developer most affected by the EU-Microsoft agreement. I would be
very interested in reading Jeremy Allison's comments on the EU-Microsoft
agreement. Hopefully he will take the time to write an article on the subject.

---------------
Steve Stites

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This reminds me of an Onion article...
Authored by: Anonymous on Monday, October 22 2007 @ 03:10 PM EDT
Anyone else remember Microsoft Patents Ones, Zeroes? It's funny because it's trueuncomfortably close to the truth--I'm sure they would if they could.

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Patent Issues
Authored by: Simon G Best on Monday, October 22 2007 @ 03:16 PM EDT

I can imagine the patent issues aren't going to be simple, or particularly satisfactory, for a few reasons:-

  • US patents are US patents. The US is not part of the EU, and is outside the Commission's jurisdiction.
  • There is no "Community patent", yet. The European Patent Office is to do with the European Patent Convention, which is not an EU thing. So, again, there are jurisdictional questions, and that sort of thing.
  • How many relevant patents does Microsoft actually have in the EU? Does Microsoft even have any relevant patents in any EU states?

Basically, I don't think we can realistically, or reasonably, expect anything beyond the Commission's jurisdiction. I'd imagine that leaves patents being a bit tricky, but, well, that's the nature of patents anyway. The real solution is to deal with the real patent problem.

---
"Public relations" is a public relations term for propaganda.

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Get out of jail "nearly" free card?
Authored by: Brian S. on Monday, October 22 2007 @ 03:19 PM EDT

The regulator won't appeal the trustee aspect of the ruling, commission spokesman Jonathan Todd said today. The EU's second- highest court in September said Microsoft shouldn't have to pay the cost of the trustee to monitor its compliance.....

Microsoft has an ``ongoing obligation'' to update the information as its products evolve, the commission said. Failure to do so could result in daily penalties, it said.

Bloomberg


Brian S.

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Patent provisions put GPL out in the cold?
Authored by: Anonymous on Monday, October 22 2007 @ 03:22 PM EDT
GPL can't use the patented Microsoft interoperability standards, since it must
allow sublicensing. Looks like the EU-Microsoft patent pact has killed off GPL
software at a single stroke.

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Americans, Sort Out Your Own Patent Problems!
Authored by: Simon G Best on Monday, October 22 2007 @ 03:28 PM EDT
However, I don't think they understand how seriously broken the US patent system is currently, and how easy it is to abuse it, or they don't feel it's their job to fix the US problems, or how central patents are to Microsoft's current strategy against FOSS.

Of course it's not "their job to fix the US problems"! Until you toss that Declaration of Independence of yours on the fire (or, say, join the EU or the European Patent Convention), your patent problems are not our responsibility. If this European settlement is no good for you - tough. Please get your own, American house in order first, before criticising foreign powers for failing to solve with your own, American problems.

If you want to enjoy the benefits of FOSS, without the problem of patents, you're just going to have to deal with your own basket case of a patent system. Just don't expect the rest of the world to work around your domestic problems for you instead.

---
"Public relations" is a public relations term for propaganda.

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Interoperability
Authored by: Anonymous on Monday, October 22 2007 @ 04:03 PM EDT

This is a very bad deal indeed, because for the first time, it lets a company charge for interoperability. Ballmer has outwitted Kroes.

Nobody paid IBM for being PC-compatible. That's one reason the personal computer market innovated and expanded.

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How do they define revenues?
Authored by: cmc on Monday, October 22 2007 @ 04:04 PM EDT
"Microsoft will now offer a worldwide patent licence for a reduced royalty
of 0.4 % of licensees’ product revenues"

I'm curious. This could be a generic term that I'm just ignorant of its
meaning, so I'll ask anyway. How do they define "revenues"? Is it
0.4% of gross revenues or net revenues? If your profit margin is only 2%, then
0.4% of gross revenues would be 20% of your profit. If your profit margin is
10%, then 0.4% of gross revenues would be 4% of your profit.

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What do you think?
Authored by: Anonymous on Monday, October 22 2007 @ 04:13 PM EDT
".....or they don't feel it's their job to fix the US problems...."

Is it their job?

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They've told us before
Authored by: nickd on Monday, October 22 2007 @ 04:33 PM EDT
"The Commission remains committed to ensuring that in due course it will become possible to use certain interoperability information from Microsoft in software products distributed under an open source licence"
-- europa.eu
Now we now what they meant with "certain" - the not patented ones
:( What a huge disappointment!

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whose task is to fix the US patent mess
Authored by: Anonymous on Monday, October 22 2007 @ 04:34 PM EDT
Certainly not the EU's. This very decision drew a lot of scolding from US
officials (when they have no business in it), what do you think what would
happen if the EU 'tries to fix' the US patent problem???

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What is this remark related to? Anybody?
Authored by: SilverWave on Monday, October 22 2007 @ 04:45 PM EDT
from the Q&A:
"Why in a country which is halfway out of the EU, if you see what I mean?
(laughter) Especially after the events of last week?"

hmmmm...

---
Software Patents are leeches on the creativity of mankind.

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The MS-EU Settlement
Authored by: Chris Lingard on Monday, October 22 2007 @ 06:16 PM EDT

Here is Press statement

“At the time the Court of First Instance issued its judgment in September, Microsoft committed to taking any further steps necessary to achieve full compliance with the Commission’s decision. We have undertaken a constructive discussion with the Commission and have now agreed on those additional steps. We will not appeal the CFI’s decision to the European Court of Justice and will continue to work closely with the Commission and the industry to ensure a flourishing and competitive environment for information technology in Europe and around the world.”

I am happy with the "deal" because it allows competition. If I had an application I could start a company, buy a license, and market my application.

I only need to do the patent deal if I want to export to the USA

For too long Microsoft have been taking their taxes from our economy, with no returns. Every year they take $2,000,000,000 out of the United Kingdom, only paying a peppercorn tax in Ireland, and giving us no benefits from this,

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Agreement appears good for European developers
Authored by: Anonymous on Monday, October 22 2007 @ 06:52 PM EDT

The EU Commission in this case is charged with "bringing competition and innovation back to the server market" in countries that are part of the EU. They are not charged with ensuring that any one open source license is favored or disfavored.

Press release link

The MS-EU agreement means that there will apparently be three paths available for developers to create alternative products that are able to interoperate with MS server products. The first two appear to be most appropriate for commercial product development, while the third only covers non-commercial development.

The first path is a so-called "No Patent Agreement" where developers are allowed to access interoperability specifications, but are given no licenses for use of any patented technology which may be utilized to implement conforming products. The changes to this approach negotiated by the EU Commission are:

  • altering the terms of the licence so that it is compatible with the open source business model
  • reducing the royalty to a flat fee of €10 000
  • allowing effective private enforcement of warranties regarding the completeness and accuracy of the information provided.

This type of agreement seems most suitable for large corporations which either have pre-existing patent agreements with MS, or that have sufficient legal resources and/or patent portfolios to feel safe from threats by MS over patent issues. For such organizations, 10K euros is nothing for a royalty fee.

The second is a "Patent Agreement" for patents "which Microsoft considers relevant", whatever that means. The press release says "Microsoft will now offer a worldwide patent licence for a reduced royalty of 0.4 % of licensees’ product revenues." This sounds like a reasonable deal for European companies that don't fall into the first category described above who feel the need to purchase protection from MS threats of litigation. The upside is that adopters of this approach will get a world-wide license, allowing them to export products into countries like the U.S. which give software patents greater value than in most parts of Europe. If that happens to give European software companies an advantage over U.S. competitors, it probably seems like a bonus to the EU Commission.

The third path is open only to "non-commercial open source software development projects". Microsoft has agreed to "publish an irrevocable pledge not to assert any patents it may have over the interoperability information." This means that pure non-commercial projects in Europe would be free to develop conforming products without fear of patent litigation over interoperability issues, and would be free to distribute the results of their work in a non-commercial manner. It would then be up to individual commercial software vendors and distributors to decide whether to adopt such efforts after perhaps availing themselves of one of the previous options described earlier. In any case, individual users could always adopt the non-commercial products, or most likely acquire them from non-commercial distributors, for personal use without worry about any patent liabilities.

On the big plus side, this agreement appears to allow competing products to be developed with practical conformance to MS-proprietary protocols. The real goal isn't for FOSS products to simply emulate MS ones, but rather to ultimately gain acceptance as legitimate replacements for them. But in order to do this, the MS vendor lock-in barrier has to first be overcome. This agreement may help achieve this necessary first step, at least in Europe. The potential downside for the FSF is that the new GPLv3 may prove too problematic for many organizations to fully adopt because of its built-in entanglement with patent issues. The agreement may further highlight differences between the various "free software" and "open source software" camps.


--bystander1313

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Microsoft concessions evoke big yawns....
Authored by: Anonymous on Monday, October 22 2007 @ 08:18 PM EDT
ZdNet Blogs

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Worse than useless.
Authored by: Anonymous on Monday, October 22 2007 @ 08:39 PM EDT
I think at this point it would have been better for free software if the EU
anti-trust litigation had never been born. MS seems to have completely deluded
the EU about the nature of its competition, and these ineffectual remedies give
the pretense of reform without any of its substance. Somewhat ironically, the US
anti-trust litigation will have had far more of a positive impact than this in
the long run. At least that managed to give firefox and other open source
applications a fighting chance on the windows platform. Because this
"interoperability" is locked up in MS patents, it's of absolutely no
use to free software whatsoever. The shows over, and the EU wasted its and
everybody else's time.

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Some ambiguity...
Authored by: myNym on Monday, October 22 2007 @ 09:16 PM EDT
Compare:

"second licence (the “Patent Agreement”) is for the patents which Microsoft
considers relevant"

and

"Companies therefore continue to have a choice of agreement"

So which is it? Do companies have a choice? Or does MS get to decide which
license applies?

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Let's Make a Deal - The MS-EU Settlement
Authored by: Anonymous on Monday, October 22 2007 @ 10:52 PM EDT
European citizens should seriously complaint about this, this not less of a huge
victory to MS' monopoly, I do not want to say that MS bought the EU but it looks
so.

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Not enough information to judge the deal yet
Authored by: tridge on Monday, October 22 2007 @ 11:11 PM EDT
As many of you may have guessed, the Samba Team is watching these developments
closely, but as yet there is not enough information available to us to know
exactly how useful this agreement is going to be.

We are working closely with the FSFE lawyer, Carlo Piana, and Eben Moglen of the
SFLC who are providing us with guidance on how the free software community can
best take advantage of the agreement that Microsoft has made with the
commission. There is a lot of uncertainty at this stage about some critical
details of the agreement.

So please don't take anything for granted just yet. Once we know the necessary
details we will post our reactions to the deal.

Cheers, Tridge

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AP Confusion
Authored by: stomfi on Tuesday, October 23 2007 @ 05:59 AM EDT
These are words from the AP article

"The company will now charge a one-time fee of 10,000 euros ($14,310) to
any developer — including those working on open source systems such as Linux —
for "complete and accurate" technical information to help make
software compatible with Windows. It had previously demanded a percentage of
future sales.

Developers — such as IBM Corp. and Sun Microsystems Inc., which sell software
based on Linux — will pay a worldwide patent fee of 0.4 percent of revenues for
Microsoft's data. Microsoft's original rate was 5.95 percent.

Microsoft will now charge for only 31 server protocols under patent instead of
the 154 originally offered for licensing."

So says AP. One wonders what the middle paragraph means. What software do these
companies sell based on Linux?
Do they mean works on Linux?
What is MS data?
Do they mean revenues gained from using the protocols?
Or do they mean from the use of the documentation?

The final question is - can FOSS that doesn't generate revenue, freely use the
31 protocols?

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Is a reference implementation possible?
Authored by: Anonymous on Tuesday, October 23 2007 @ 01:24 PM EDT
Years ago, I found a program mpeg2dec, an MPEG-2 decoder, which was slow but
commented quite well. I can't remember the licensing of the thing, but one could
use it as a reference implementation of the MPEG-2 standard. I also have no idea
what a license would cost or what the patent royalties would be. But can anyone
please comment on the feasibility of the following chain of actions (hey, I can
dream, can't I?):

1. Someone in Europe buys the Microsoft documentation for €10000

2. They create a well-documented reference implementation which contains no
verbatim text from the (presumably copyrighted by MS) original documentation

3. They publish this under GPL 3 or later, making it available as the standard
library to build your own 100% compatible MS printer server / whatever as long
as you don't do business in countries that have software patents (where such
patents might be active, hence triggering clause 11 ("If you convey a
covered work, knowingly relying on a patent license, ...")).

I wonder whether this would work (i.e. would it be legal both outside and
imported inside USA), and secondly, would it be a good idea, or something to be
avoided.

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basic and necessary
Authored by: Anonymous on Wednesday, October 24 2007 @ 07:18 AM EDT
If it's basic enough and necessary enough, you can't do so and still function normally.

On the other hand, the more basic and necessary it is, surely the likelier it is it can be invalidated?

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Let's Make a Deal - The MS-EU Settlement - Updated
Authored by: Anonymous on Wednesday, October 24 2007 @ 08:51 PM EDT
The EC does not call it a "settlement" - it is an enforcement of its
earlier decision.

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